Russian-flagged vehicles in Ukraine

Armoured vehicles bearing Russian flags have rolled through a flashpoint town in eastern Ukraine, a day after Russian President Vladimir Putin warned the country was on the brink of civil war.

Tensions continued to mount ahead of high-level diplomatic talks on the Ukraine crisis in Geneva on Thursday after Kiev sent in troops to oust pro-Moscow separatists from the east.

A reporter in the town of Slavyansk saw at least six APCs on Wednesday, some flying Russian flags, carrying dozens of armed men through the town.

Russian media said Ukrainian troops in the vehicles had switched sides to join the separatists but the Ukrainian army said it had no reports that any of its equipment had been seized.

Elsewhere, pro-Russian gunmen stormed the mayor's office in the regional capital of Donetsk, according to a reporter at the scene.

As the situation on the ground appeared to escalate, the authorities in Kiev ratcheted up the verbal attack on Russia, with Prime Minister Arseniy Yatsenyuk accusing Moscow of trying to build "a new Berlin wall".

Russian commanders in the separatist east had issued pro-Kremlin militants with "shoot-to-kill" orders, the Ukrainian Security Service (SBU) said in a statement.

Yatsenyuk demanded Moscow halt its alleged support for the separatists.

"There is only one directive for the Ukrainian foreign ministry - the Russian government has to immediately withdraw its commando groups, condemn the terrorists and demand they leave the installations," he said.

Nevertheless, he said Kiev remained committed to Thursday's crunch talks scheduled in Geneva between the top diplomats of Russia, the European Union, the United States and Ukraine.

On Tuesday, authorities in Kiev launched what they called an "anti-terrorist operation", sending tanks towards Slavyansk - which remains effectively under the control of pro-Russian gunmen - in a high-risk strategy sharply condemned by the Kremlin but supported in Washington.

The 20 tanks and armoured personnel carriers sent to Slavyansk were the most forceful response yet by the Western-backed government in Kiev to the pro-Kremlin militants' occupation of state buildings in nearly 10 cities across Ukraine's industrial heartland.

But the move drew a sharp response from Putin in a telephone conversation with German Chancellor Angela Merkel.

"The Russian president remarked that the sharp escalation of the conflict has placed the country, in effect, on the verge of civil war," the Kremlin said in a statement.